Major debates over macroeconomic policy, economics homework help

timer Asked: May 29th, 2017
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Question Description

Purpose of Assignment

This week requires the student to address six unresolved issues in macroeconomics, each of which is central to current political debates. Students are required to use information and tools that they have accumulated in their study of the text and evaluate both sides of those issues, determine which side they can support for each issue, and defend their positions.

Assignment Steps

Select two subjects from the following list of topics and write a 1,050-word analysis:

  • Active monetary and fiscal policy
  • Increased government spending to fight recessions
  • Reducing federal government's discretionary powers
  • Zero-inflation target
  • Balanced government budget
  • Tax incentives for saving

Evaluate both the advocates' position and the critics' position.

Determine which position you support and defend your position.

Cite a minimum of three peer-reviewed sources not including your textbook.

Format consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

Tutor Answer

School: Boston College



Major Debates Over Macroeconomic Policy

Institutional Affiliation





Active monetary and fiscal policy and the increased government spending in fighting
recessions are major unresolved issues in macroeconomics which are central to the current
political debates. There is a division between the policymakers on whether increasing the
government spending through an expansionary policy can fight recession by promoting
economic growth or whether it would hinder the growth of the economy (Cloyne & Hürtgen,
2016). There is also a debate on whether to implement a monetary policy or a fiscal policy in
stimulating the growth of the economy whereby the two opposing sides have valid reasons for
their arguments. This paper discusses the arguments on whether to implement a monetary or
fiscal policy in stimulating the economy and whether increasing the government expenditure
would fight recessions or not.
Active monetary and fiscal policy
Active monetary and fiscal policies are powerful policies that the Federal Reserve and the
government can use in steering the economy in the right direction (Langdana, 2009). When they
are applied correctly, they may have a similar impact of increasing the growth of the economy
and slowing down the rate of recession. However, the major political debate revolves around the
policy which is more effective in stimulating the growth of the economy.
Active Fiscal policy
A fiscal policy is whereby the government uses its taxing and spending power to impact
the economy in the required direction. An indirect or direct fiscal policy can have an influence
on capital expenditure, personal expenditure, deficit levels, ex...

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